Pay Policy Statement:

2019/20

1. Introduction & Purpose

This Pay Policy Statement sets out the council’s approach to pay policy in accordance with the requirements of Section 38 of the Localism Act 2011 and due regard to the associated Statutory Guidance including the Supplementary Statutory Guidance issued in February 2013 and the Local Government Transparency Code 2015.

Section 112 of the Local Government Act 1972 gives local authorities the power to appoint officers on such reasonable terms and conditions as the authority thinks fit, the pay policy sets out how the council exercises this power.

The purpose of the statement is to provide transparency with regards to the council’s approach to setting the pay of its employees by identifying:

- the methods by which salaries of employees are determined;
- the detail and level of remuneration of our most senior staff i.e. ‘chief officers’, at Assistant Director level and above.

Once approved by full council this policy statement will come into immediate effect and will be subject to review on an annual basis.

2. Scope of the Pay Policy Statement

The statement relates to employees of Salford City Council whose remuneration, including rate of pay and terms and conditions, are determined by and within the control of the authority. It therefore does not apply to:

- All employees working in schools;
- Individuals employed by a third party contracted to work for the authority i.e. agency workers;
- Employees on secondment where their rates of pay or terms and conditions are not determined by the authority;
- Individuals employed through the authority on behalf of a third party where remuneration and other terms and conditions are not determined by the Authority;
- Volunteers or work experience placements.

3. Other matters relating to pay arrangements

The council takes steps to ensure that there is no pay discrimination within its pay structures and in determining the pay and remuneration of all of its employees, complies with all relevant employment legislation. This includes legislation such as the Employment Rights Act 1996, Equality Act 2010, Part Time Employment (Prevention of Less Favourable Treatment) Regulations 2000 and where relevant, the obligation to protect salaries under the Transfer of Undertakings (Protection of Employment) Regulations.

In determining its grading structure and setting remuneration levels, the council takes account of the need to ensure value for money in respect of the use of public expenditure, balanced against the need to recruit and retain employees who are able to meet the requirements of providing high quality services to the community, delivered effectively and efficiently and at times at which those services are required.

4. Context

Salford City Council is going through a period of significant growth, reform and transformation as a result of a number of political, economic and social drivers and challenges, national and local, some of which are identified below. We recognise the need for flexibility to be able to respond to a changing landscape and our pay policy arrangements have been developed to reflect this.

Mayoral Priorities – The Great Eight

Salford has changed and is continuing to change; at the heart of our approach are ambitious plans to transform Salford into a modern global city where we can all make a real difference to the lives of Salford people. By delivering our ‘Great Eight’ priorities we will achieve our vision for a better and fairer Salford. Our vision is underpinned by these priorities of tackling poverty and inequality, education and skills, health and social care, economic development, housing, transport, a transparent effective organisation and social impact. Tackling poverty is key to delivering our vision, as one of the largest employers in the city we have a role to play as an exemplar for the wider Salford workforce. With 60% of our employees resident in the city the Council has a key role to play in setting an equitable pay structure, preventing people from falling into poverty through our approach to pay, and ensuring that those in the lowest paid jobs receive a fair living wage.

The Anti-Poverty strategy, ‘No One Left Behind’ creates a vision for a fairer and more inclusive Salford, where everyone is able to reach their full potential and live prosperous and fulfilling lives free from poverty and inequality. Low pay is recognised as a key cause of poverty and ensuring that wages and income levels are fair and appropriate, enables residents to fully participate in the life of the community. To help achieve this vision, collective efforts are focussed on the activities likely to have the most substantial and long lasting impact in reducing poverty in the city.

Social Value

Salford as a city is one of the leading areas nationally for building social value. The creation of the Social Value Alliance, Social Value pledge and online toolkit ensures that the social impact of activity across the city is understood and prioritised. Salford City Council produced its first social value policy and impact report in 2017 and we are now looking at the progress made against all of our pledges and showing how we are using social value for a better and fairer Salford. Our mission is to continue to look at the relevant and additional social, environmental and economic value from everything that we do, including service delivery, commissioning and procurement. Salford City Council is committed to continuing to deliver the Social Value Alliance 10% Better Campaign outcomes, develop a values based ethos, promote leadership around social value and collaborate with others to maximise the benefit to Salford from social impact.

**Employment Standards Charter**

The City Council sets the standard as an exemplar employer and must ensure that all our remuneration and employment policies, procedures and practices reflect our Employment Standards Charter. Leading the way we will promote the Foundation Living Wage as a minimum standard, access to training and development, no zero hours contracts, and no blacklisting policy to employers across the city creating growth and prosperity.

**Fiscal challenges**

We need to ensure provision of services within a significantly reduced and ever-reducing financial envelope, which in turn requires a continuing reduction in workforce numbers and service redesign. Balanced with the continuing need to attract and retain talent in the workforce.

**Reform**

Set in the context of reducing resources and growth in the city, together with the challenge we have set ourselves to do things ‘quicker, easier and better,’ we need to develop new ways of working with our partners, residents and vibrant voluntary and community sector to make the best use of the city’s collective resource. To achieve this we need a flexible, skilled, customer focused, motivated and outcomes focused workforce with the right values base that is empowered to innovate and ‘take charge’ of how they deliver services.

We will continue to transform our services to the public with the Greater Manchester model of public service delivery being central to our work at a regional and local level.

A place-based and person centred approach continues to drive reform at a locality and neighbourhood level. Salford’s Locality Plan sets out our strategic approach to improving health and care outcomes for residents of the city. The health and care workforce comprises a significant proportion of the working population of Salford as a whole and therefore workforce transformation is a key priority over the next five years.

Salford is aiming to become a Digital City, an ambition which supports the vision for a better, fairer Salford to improve our residents’ lives. We are strongly committed to digital inclusion – making sure that residents and our workforce have the digital capability to maximise the use of technology and the internet.

Salford is proud to have been named Overall DL100 Winner 2018 (Digital Leaders) and Digital Council of the Year at the prestigious DL100 awards ceremony. This has become the premier list identifying individuals and teams leading digital transformation in the UK. Salford won both awards for its bold ambitions and innovations in the way it is digitally transforming services to the public.

The appointment of a City Chief Digital Officer (CDO) to lead the digital transformation of Salford is a clear indication of our ambition and desire to build networks and relationships across the wider region. Salford also has aspirations to become a Digital Council. We are using digital transformation to ensure services are quicker, easier and better for everyone through the introduction of a transactional website and webchat to many other new and exciting digital developments, the council is empowering residents and improving access to information and services. We also want to make sure no one is left behind as digital becomes the way to access services, communicate with organisations, and interact with friends and family.

Working with Good Things Foundation to deliver Digital You, our landmark digital inclusion project across the city to help the most disadvantaged residents gain the confidence and capability to become independent users of computers and the internet. Digital is fundamental to how modern society works – 90% of new jobs require digital skills, and our health, wellbeing and social lives are increasingly underpinned by digital tools and resources.

Our programmes of reform at a place and regional level are changing how we currently operate, how we shape our workforce and adopt new ways of working. This has required a different approach to how we organise and design our services. Changes at an organisational level mean that we operate less through formal structures and more about bringing together officers across the council to deliver effective cross cutting outcome projects. This enables employees to come together in to project teams if they are the right person, regardless of their day to day role – to get the job done.

Our service reform directorate puts reform at the core of the organisation and brings together enabling functions to drive change in line with our redesign approach. This centres on true co-design and co-production and engagement with all stakeholders ensuring all have a voice and input in to designing services. Leaders are challenged to empower employees to change what gets in the way allowing those who do the work to own and lead the change. This approach also reflects the important role of technology, end user involvement (employees and residents), and understanding the user experience and customer journey as part of the redesign of our services.

This approach will continue to ensure that our workforce is connected with, and delivers on the vision, themes and priorities of the City Council. Leading Salford

The role of Leaders continues to change with expectations of leading in a whole place and system as well as within and on behalf of the City Council. The #LeadingSalford leadership framework has been developed with clear expectations of leaders and managers in Salford. This framework builds on the Greater Manchester leadership expectations and has provided clarity of expectations in terms of how leaders and managers operate and their behaviours. It is underpinned by a consistent approach to leadership development and has been designed to enable everybody to understand what it means to be a leader in Salford.

Managers are the single most important factor in employee engagement, motivation, building a productive workplace and employee retention. Effective leaders and managers are critical to the success of reforming public services and therefore investment in developing their skills is essential.

Growth in the City

The city has seen exceptional levels of growth over recent years. More people than ever before are choosing Salford as a place to live, work, invest and visit.

The council is concerned to ensure that wages (salaries) in the city can sustain families and individuals and underpin a thriving economy. Our new local pay model ensures a minimum hourly rate of £9.25 for those on graduate programmes and higher level apprenticeships with a minimum hourly rate for all other Council employees of £9.44 from 1st April 2019. These rates are significantly higher than the Foundation Living Wage of £9.00 per hour.

The Council does however continue to use its influence as a civic leader to encourage others to pay the living wage – with the ultimate aim of leading Salford to becoming a living wage city. This aim is supported by the charter for employment standards which sets the benchmark for working conditions in the council as an exemplar employer and for other employers across the city including the living wage.

5. Workforce Strategy

The vision for our future workforce together with the framework and approaches required to achieve this are outlined in our Workforce Strategy. The strategy is designed to support the council to develop a skilled and motivated workforce to deliver our mission to create the best quality of life for the people of Salford. It is only through our people that we will realise these ambitions for the city.

The Workforce Strategy is being refreshed in line with the Great Eight priorities and the public service reform agenda from 2019 onwards. This strategy sets out how we are leading the way to make Salford a great place to work. It includes how we intend to develop our talent, embed flexible and smart working practices, improve wellbeing, inclusion, performance and digital skills, reshape our workforce to encourage innovation and creativity, and to embed values-based leadership and a positive permission culture. The strategy aims to support the City Council in achieving the skilled, motivated, flexible and diverse workforce needed to deliver placed based, integrated services that make a difference to the people of Salford. We recognise that our success as an organisation is dependent on the commitment, dedication and approach of every person that works across the system with the Spirit of Salford and values at the heart of everything we do.

Our core values are;

**Pride** I’m proud of and committed to our city, its people, our work, and I demonstrate the ‘Spirit of Salford’ in everything I do.

**Passion** I am optimistic and ambitious for the city and its people, being creative and positive about change and making the most of opportunities.

**People** I respect and care for others, treating everyone fairly, listening and acting on the things people say.

**Personal Responsibility** I am honest, taking responsibility and ownership for my actions and decisions and using resources that I am trusted with wisely.

The values inform the way we operate and influence our choices, behaviours, how we make decisions and transform services.

By putting the values into practice individuals demonstrate personal commitment to ‘be the best they can be’ in the way that they do their jobs, provide quality services, deliver the priorities and make a difference to the people of Salford.

6. **Pay strategy and salary structure**

As one of the largest employers in the city the council is mindful of the impact of its employment and remuneration policies and practices on the local economy and communities. The proportion of council employees (excluding schools) who live in the city as of January 2019 is around 60%. This means that they not only serve the people of Salford but are also direct recipients of council services and contribute to the local economy.

It is vital therefore that the council remains an exemplar employer through its employment frameworks and practices and is seen as an ‘employer of choice’ to attract and retain employees of a high calibre throughout the organisation. The council’s approach includes:

- The internal operation of the Employment Standards Charter which sets out minimum employment standards (including the living wage) and encouraging its adoption by other organisations securing fair remuneration and employment practices across the city.
- Delivery of the Workforce Strategy objectives.
- Managing changes in workforce numbers, roles, skills and working patterns to meet changes in service delivery models by further developing the internal labour market through talent management, development of the creating capacity programme, maximising the opportunities provided through the apprentice levy, succession planning and career pathways.
- Through the City Council’s reform agenda, adopting a change management approach to service redesign, which focuses on employee engagement and involvement in the redesign of the services that they deliver. To ensure organisational agility this approach centres on the purpose, functions and outcomes for services, rather than how they are currently organised and structured. This approach to organisation design will enable the council to effectively adapt and respond to change whilst also developing and shaping the workforce for the future.

In determining its grading structure and setting remuneration levels, the council takes account of the need to ensure value for money in respect of the use of public expenditure, balanced against the need to recruit and retain employees who are able to meet the requirements of providing high quality services to the community, delivered effectively and efficiently and at times at which those services are required.

The council will use flexible and innovative approaches to workforce planning through its Creating Capacity programme together with maximising the opportunities which the apprentice levy brings, developing skills, capacity and opportunities for progression combined with the creation of entry level opportunities and apprenticeships.

**Salary structure**

The council uses the nationally negotiated pay spine (i.e. a defined list of salary points) as the basis for the pay structure in place to determine the salaries of the majority of its (non-teaching) workforce, together with the use of locally determined rates where these do not apply.

The council adopts the national pay bargaining arrangements in respect of the establishment and revision of the national pay spine, for example through any agreed annual pay increases negotiated through the National Joint Councils.

All other pay related allowances are the subject of either nationally or locally negotiated rates, having been determined from time to time in accordance with collective bargaining machinery.

New appointments will normally be made at the minimum of the relevant pay scale for the grade, although this can be varied where necessary to secure the best candidate within the parameters of the salary scale as determined via the job evaluation process. The decision on the salary to be offered will be delegated to the appointment panel for the post. From time to time it may be necessary to take account of the external pay levels in the labour market in order to attract and retain employees with particular experience, skills and capacity. Where necessary, the council will ensure the requirement for such is objectively justified by reference to clear and transparent evidence of relevant market comparators, using data sources available from within the local government sector and outside, as appropriate and in line with the agreed Market Enhancement Policy.

In addition, any temporary supplement (honorarium) to the salary scale for the grade is approved in line with the Scheme of Delegation and Council Constitution.

7. National Joint Council for Local Government Employees (NJC) Pay and Grading Arrangements

Posts under NJC terms and conditions are all evaluated through the nationally agreed NJC job evaluation scheme. This scheme covers the vast majority of posts within the council, and extends from spinal column point 1 of the new national pay spine for the lowest paid staff, to senior roles at spinal column point 46.

A small number of non-teaching posts are paid in accordance with the Joint National Council for Youth and Community Workers terms and conditions and those set by the Soulbury Committee. In addition, there are a number of teachers employed directly by the council who are paid in line with School Teachers pay and conditions.

The national pay agreement for 2018 and 2019 was agreed on the 10th April 2018 by the National Joint Council for Local Government Services. This two year agreement addressed the changes required to meet the national living wage ensuring that the national pay spine met the proposed increases over the next two years.

The first year (2018) of the agreement was ‘bottom loaded’ to close the gap with the national living wage and meant that the bottom spinal column points (SCP) saw an increase of up to 9.19% with all SCP’s over point 20 receiving 2%. The second year (2019) provides for a pay award of 2% across all SCP’s however in order to manage the national living wage increases there has also been a fundamental review of the national pay spine.

The new national pay spine begins at point 1, introduces a number of ‘new’ points and the top of the spine has been set at SCP 43. The current national pay spine has 49 points with the reduction in pay points being achieved by consolidating a number of the points at the bottom of the pay spine.

As well as seeking to manage the implementation of the national living wage the revised pay spine also sought to address some of the disparity between the increments and to introduce more uniform incremental progression. The aim was to ensure no more than a 2% increase between SCP’s which has been achieved by the consolidation of the lower points and the introduction of some new SCP’s around the middle of the pay spine. The new national pay spine changes local pay models, which in effect is a variation to contract, and therefore the Council has reached a local collective agreement with the Trade Unions to implement the changes from 1st April 2019.

The local pay model which implements the new national pay spine offers minimal disruption and maintains the integrity of the current local pay model and structure including grade boundaries and job evaluation scores and delivers on the key principles agreed with the trade unions.

A full equal pay audit and impact analysis has been undertaken of the revised pay structure which demonstrates that there are no gender inequality concerns.

8. Chief Officer Pay and Grading Arrangements

The council’s Chief Officers, as defined by the Localism Act, constitutes the Senior Leadership Team which is directly responsible for the key functions of the organisation. The Hutton Report acknowledged that high quality public services require high calibre leaders to deliver them. Vital to this is to ensure that public service leaders are adequately and fairly rewarded. If senior officers are inadequately rewarded it will be more difficult to attract and retain individuals of the calibre required to lead on public service reform.

The council uses the chief officer job evaluation scheme developed by the Local Government Employers. This scheme applies to all senior posts paid on locally determined salary points from spinal column point 53 and above, incorporating all chief officer posts. This provides assurance that all pay differentials can be objectively justified through the use of job evaluation mechanisms, which directly establish the relative levels of posts and grades according to the requirements, demands and responsibilities of the role.

The posts within the council falling within the definition ‘chief officers’ as defined within the Localism Act are those at second tier which is Assistant Director and above and constitutes the council’s Senior Leadership Team. Information regarding their salaries is available on the council’s website together with information on posts with a salary greater than £50,000.

In line with Accounts and Audit (England) Regulations 2015 posts where the full time equivalent salary is at least £50,000 will be referenced in the council’s Annual Statement of Accounts which will include a note setting out the total amount of:

- salary, fees or allowances paid to or receivable by the person in the current and previous year;
- any bonuses so paid or receivable by the person in the current and previous year;
- any sums payable by way of expenses allowance that are chargeable to UK income tax;
- any compensation for loss of employment and any other payments connected with termination;
- any benefits received that do not fall within the above. In line with the Local Government Transparency Code 2015 the council also publishes an organisation structure chart covering staff in the top three levels, together with a list of all posts with a salary that exceeds £50,000 including details of duties and responsibilities and contact details.

This information can be found on the finance pages, the FOI pages and the open data pages of the website.

As part of the wider Green Wheels Travel Plan, the City Council introduced a car club for all business travel in 2015 and all Chief Officers are covered by this scheme.

Progression through the incremental scale of the relevant grade is subject to satisfactory performance, which is assessed on an annual basis in accordance with the arrangements and factors set out within the council’s agreed performance review scheme. There is no additional remuneration which is subject to performance e.g. performance related pay or bonuses of any kind.

9. Election Fees

The council is required to provide funding to the Returning Officer to discharge statutory functions relating to the administration of local government elections. The Returning Officer sets and makes payments for the management and administration of local elections from resources made available by the council. The Returning Officer will make payments to those officers who undertake specific duties in relation to the elections (including chief officers) depending on their role. The Chief Executive does not receive any additional payment for work in relation to local elections.

Any fees payable for duties in connection with Parliamentary and European elections, Police and Crime Commissioner elections and national referenda are funded by Central Government. Consequently, any such payments made to those officers who undertake specific duties in relation to these elections and referenda (including chief officers and the Chief Executive) are not funded by the council.

10. Pay ratios

The council does not have a target for the ratio between the pay of the highest earners and other employees. It does not propose to set one for the foreseeable future, accepting the judgement as summarised on page four of the Hutton Report, that such targets serve no useful purpose. However, it will monitor this relationship to ensure that the remuneration of the highest paid is not excessive and remains consistent with the needs of the council as expressed in this policy statement. The current salary multiple between the highest paid (Chief Executive) and both the lowest and median rates for all officers within the scope of this policy are set out below:

Highest to lowest paid (£156,584 - £16,863) 1:9.29

Highest to median pay (£156,584 - £23,111) 1:6.78 11. Equal Pay Audit

The City Council undertakes an annual equal pay audit comparing the pay of protected groups who are doing equal work in the authority, investigating the causes of any pay gaps by gender, ethnicity, disability, age, or working pattern and putting in place plans to close any gaps that cannot be justified on grounds other than one of those characteristics.

A full audit of the new pay model has been undertaken and based on the current analysis no statistically significant pay gaps have been identified for any of the protected groups.

The council is committed to improving the levels of equalities data held, and the position in relation to equal pay will be monitored and reported on an annual basis.

12. Gender Pay Gap

The Equality Act 2010 (Specific Duties and Public Authorities) Regulations 2017 introduced specific requirements for public sector employers with more than 250 employees to publish the following information relating to their gender pay gap:

- The difference in mean pay between male and female employees
- The difference in median pay between male and female employees
- The difference in mean bonus pay between male and female employees
- The difference in median bonus pay between male and female employees
- The proportions of male and female employees who were paid bonus pay; and
- The proportions of male and female employees in each quartile of their pay distribution.

The mean gender pay difference for Salford City Council is 13.3%. The median gender pay difference is 15.4%. There is no bonus gender pay gap as the City Council does not operate any bonus pay scheme.

The following graph shows the proportion of male and female employees in each quartile of their pay distribution: During the last 12 months we have seen some progress as the mean gender pay gap has reduced by 1.3% and the median pay gap has reduced by 3.9%. We have seen an increase in the percentage of females across our upper middle and upper quartiles which are our most senior roles and grades. There are also more females than ever before accessing our leadership development programme. We continue to offer flexible working arrangements at all levels across the Council to ensure a positive work/life blend for all employees irrespective of grade.

Within our lower pay bands, the introduction of our new pay arrangements mean that over 400 female employees will receive more than a 7% increase in their hourly rate. Further analysis has also been undertaken to look at our proportional gender pay gap which takes account of workforce composition at each pay grade across the organisation. Further information is provided in Salford City Council’s Gender Pay Gap Report.

Gender pay differs to equal pay whereby men and women in the same employment performing equal work must receive equal pay. This is set out in legislation, to which Salford City Council as an employer is fully compliant. We will continue to undertake an annual pay audit and ensure there continues to be equity of pay between male and female employees.

12. Recruitment of Chief Officers

The council’s procedures in relation to recruitment of chief officers is set out within the Council’s Constitution and Scheme of Delegation, and is undertaken by an appointment panel in accordance with the Constitutional arrangements. Full council will be offered the opportunity to vote before a salary package exceeding £100,000 is offered in respect of a new appointment.

When recruiting to all posts the council will ensure inclusive, fair, efficient and effective recruitment practices are in place taking full and proper account of all provisions of relevant employment law whilst also developing the internal market through talent management and succession planning.

The determination of the remuneration to be offered to any newly appointed chief officer will be in accordance with the pay structure and relevant policies in place at the time of recruitment. The salary will be delegated to the appointment panel to determine in consultation with the Chief Executive.

Where the council is unable to recruit chief officers, or there is a need for interim support to provide cover for a substantive chief officer post, the council will, where necessary, consider engaging individuals under a ‘contract for service’. These will be sourced through a relevant procurement process ensuring the council is able to demonstrate the maximum value for money benefits from competition in securing the relevant service. In assessing such it should be noted that in respect of such engagements the council is not required to make either pension or national insurance contributions for such individuals. The council does not currently have any chief officers engaged under such arrangements. 13. **Additions to Salary of Chief Officers**

With the exception of progression through the incremental scale of the relevant grade being subject to satisfactory performance, which is assessed on an annual basis, the level of remuneration is not variable dependent upon the achievement of defined targets.

14. **Payments on termination & re-employment / re-engagement of former employees**

The council's approach to statutory and discretionary payments on termination of employment of chief officers, prior to reaching normal retirement age, is consistent with the approach for such payments made to all council employees. All payments are subject to approval in line with the Scheme of Delegation and Council Constitution. Senior officers i.e. those in the top three levels of the organisation are also required to enter into a termination agreement once formal approval has been agreed, which amongst other things places restrictions on their immediate employment options.

The council is currently operating a voluntary scheme whereby employees may apply for voluntary severance or voluntary early retirement. Payments under the voluntary severance scheme are calculated on the basis of length of service, age and salary to a maximum of 30 weeks’ pay. The voluntary aspect of the scheme currently attracts an enhancement equivalent to 12 weeks’ pay. Employees aged 55 or over who are members of the Local Government Pension Scheme may apply for the early release of their existing pension benefits under the voluntary early retirement scheme.

Employees who access either voluntary severance or voluntary early retirement agree (as part of the terms of the package) not to be re-employed by the council for a period of five years (VER) or two years (VS).

In accordance with the Supplementary Statutory Guidance on openness and accountability in local pay issued in February 2013 any severance packages with a value in excess of £100,000 will be approved by council before they are agreed.

The policy applies to all severance packages whether or not made pursuant to a settlement agreement.

In 2016 the Government announced the intention to cap public sector termination payments at £95,000 (inclusive of costs associated with early access of pension benefits) and that it also intends to require higher paid public sector staff (those earning £80,000 or more) to repay some or all of their severance payment if they return to the same part of the public sector within 12 months of the date of termination. The details of these changes remain unclear and an implementation date is yet to be confirmed.

When the changes are implemented they will have an impact on the Council’s policy in respect of termination payments and in particular on the Voluntary Early Retirement Scheme. The Council's policies in respect of pay and pensions will be amended in accordance with any changes in legislation.

15. Publication

Following approval by the full council, this statement will be published on the council’s website.